Analysis of Proposition 208

by the Legislative Analyst

BACKGROUND

Campaign Contribution and Spending Limits. Federal law limits the amount of money
individuals and groups can contribute to a candidate and to the candidate's campaign committee
for federal elective office. State law generally does not impose similar limits on state and local
campaigns. However, some local governments in California have established such limits for local
elective offices.

In addition, current state law contains no limits on the amounts of personal loans or personal
funds candidates can use for their own elections. Also, there are no aggregate limits on what
individuals and groups can contribute to all candidates for state and local elective offices.
Furthermore, there are no prohibitions on lobbyists making, transmitting, or arranging campaign
contributions. Finally, there are no limits on the amounts of money candidates, their campaign
committees, or other groups in support of the candidate, can spend in any election.

Reporting Requirements. Both state and federal law require candidates for elective office to
report contributions they receive and spend for their campaigns. In addition, state law requires that
lobbyists register with the Secretary of State's office.

Court Review. The specific provisions of this measure have not been reviewed by either state or
federal courts. In California and other states, a few provisions similar to those contained in this
measure have been challenged in court and have been invalidated.

PROPOSAL

This measure makes a number of changes to current state law regarding campaign contributions
and spending. Specifically, the measure:

Limits the amount of campaign contributions that an individual or group can make to a
candidate for state and local elective office and prohibits lobbyists from making contributions.

Establishes voluntary campaign spending limits.

Limits when campaign fund-raising may occur.

Establishes penalties for violations of the measure and increases penalties for existing
campaign law violations.

Limits on Campaign Contributions

Limits on Contributions to a Single Candidate. The measure establishes limits on the amount of
political campaign contributions that an individual, group (including a business, labor organization,
or political action committee), or political party may make to a candidate for statewide office (such
as the Governor), the state Legislature, and local elective office. Figure 1 summarizes these limits.
As discussed later, these contribution limits approximately double if a candidate agrees to specified
campaign spending limits. This measure prohibits the transfer of campaign funds from one
candidate to another. This measure does not set limits for any candidates for federal office.

Limits on Contributions to All Candidates. The measure restricts the total amount an individual,
business, labor organization, or political action committee, can contribute to all candidates to no
more than $25,000 in any two-year period. Contributions from political parties are limited to no
more than 25 percent of the voluntary spending limit for the office.

Other Limits. The measure limits the total amount of loans a candidate may make to his or her
campaign. These limits are $50,000 for candidates for Governor and $20,000 for all other
candidates. Officeholders and candidates are prohibited from soliciting or receiving contributions
from, or arranged by, lobbyists.

Figure 1

Proposition 208
Campaign Contribution Limits a

Candidate for:

Contributor

Legislative and Local Elective Officeb

Statewide Office

Individual

$250

$500

Business, labor organization, and political action committee

$250

$500

Political party

No more than 25 percent of voluntary spending limits for each office.

No more than 25 percent of voluntary spending limits for each office.

''Small Contributor Committee" c

$500

$1,000

Lobbyist

Prohibited

Prohibited

Transfer from other candidate

Prohibited

Prohibited

a Assumes candidate does not accept campaign spending limits. If spending limits are accepted,
then contribution limits approximately double, except for contributions from political parties. b These limits are for districts with 100,000 or more residents. Districts with fewer than 100,000
residents have lower contribution limits. c Defined by the measure as a committee with 100 or more members, none of whom contribute
more than $50 to the committee in a calendar year, and is not controlled by any candidate.

Voluntary Campaign Spending Limits

The measure establishes voluntary campaign spending limits for state offices, as shown in Figure
2. Local governments would be allowed to set spending limits, but the limits cannot be any more
than $1 per resident.
The measure requires that before accepting campaign contributions, a candidate must file a
statement declaring whether he or she agrees to accept spending limits.

Higher Contribution Limits and Access to Ballot Pamphlets. Candidates who accept the
voluntary spending limits are allowed to receive double the contribution limits shown in Figure 1.
For example, a candidate for the state Legislature who agrees to accept the voluntary spending
limits could receive a campaign contribution of $500 from an individual, while a candidate who
does not accept the voluntary spending limits would be limited to a contribution of $250.
Contribution limits from political parties, however, would not change.
In addition to being allowed to receive higher contribution amounts, candidates who accept the
voluntary spending limits would be so identified on the ballot and in ballot pamphlets. These
candidates also would be entitled to place a statement free-of-charge in the applicable state or local
ballot pamphlet. Candidates who do not accept the spending limits may also place a
statement in the ballot pamphlet, but would have to pay the costs of printing, handling, and mailing
the statement.

Figure 2

Proposition 208
Voluntary Campaign Spending Limits

PrimaryElection Limit

GeneralElection Limit

State Assembly

$150,000

$200,000

State Senate

300,000

400,000

Statewide office(other than Governor) a

1,500,000

2,000,000

Governor

6,000,000

8,000,000

a Such as Lieutenant Governor, Attorney General, and State Treasurer.

Restrictions on When Contributions
May Be Accepted

This measure places restrictions on when campaign contributions may be accepted. For any
elective office that serves fewer than one million residents, no candidate or campaign committee
may accept contributions more than six months before any primary, or special primary election.
For larger districts and statewide offices, candidates and their committees are prohibited from
accepting contributions more than 12 months prior to any primary or special primary election.
Fund-raising for all candidates must end 90 days after the date of the election or the date of their
withdrawal from the election.

Other Provisions

Penalties and Enforcement. This measure increases penalties for violations of campaign law.
Enforcement of the measure's provisions can either be through governmental agencies, such as the
state Fair Political Practices Commission (FPPC), a county district attorney, or a city attorney. In
addition, any person who resides in the candidate's jurisdiction would be allowed to sue a
candidate who violates the reporting provisions of the measure.

Disclosure of Major Donors. he measure requires that campaign advertisements for or against
ballot measures disclose the name of donors making contributions above specified levels.

FISCAL EFFECT

This measure would result in additional costs to the state and local governments. Based on
information provided by the FPPC and the Secretary of State, we estimate that the costs for
implementation and enforcement would be up to $4 million annually. The measure includes an
annual General Fund appropriation of $500,000 to the FPPC to partially offset these costs.
In addition, the measure would result in additional state and local election costs to provide
additional information on candidates in voter pamphlets. These costs are unknown, but are
probably not significant.